Columbia State Bank v. Canzoni

Decision Date01 July 2014
Docket Number44336-8-II
PartiesCOLUMBIA STATE BANK, a Washington banking corporation, Respondent, v. AMAS CANZONI and TANANA CANZONI, individually, and the marital community composed thereof, Appellants.
CourtWashington Court of Appeals

UNPUBLISHED OPINION

WORSWICK, J.

Amas Canzoni appeals the superior court's summary judgment order in favor of Columbia Bank.[1] Columbia was the beneficiary of a deed of trust to Canzoni's property, which was nonjudicially foreclosed after Canzoni's nonpayment of the promissory note secured by the deed of trust. The superior court's summary judgment order granted Columbia's complaint for specific performance of the deed of trust (by authorizing Columbia's entry on and inspection of Canzoni's property), returned Columbia's $100 bond, and dismissed Canzoni's claims with prejudice.

On appeal, Canzoni argues that (1) Columbia's counsel testified as a witness by stating facts not in evidence, (2) the superior court's consideration of the promissory note's photocopy as admissible in the original note's place violated the best evidence rule, (3) Columbia's inability to produce the original note prevents it from being the note's holder, (4) Canzoni's "EFT instrument" discharged his loan debt to Columbia, (5) fraudulent or innocent misrepresentation rendered the note voidable, (6) a lack of consideration rendered the note void (7) the superior court had no personal jurisdiction over Canzoni because he is a living person rather than a corporation, and (8) Eisenhower had an actual conflict of interest by serving concurrently as the deed of trust's trustee and as a representative of that deed of trust's beneficiary, Columbia. Because Canzoni's arguments have no merit, we affirm.

FACTS
A. Factual History
1. Canzoni's Equity Loan, Promissory Note, and Deed of Trust

In 2002, Canzoni applied for and received a $200, 000 equity loan from Community Mortgage Company. Canzoni signed a promissory note secured by a deed of trust. The note stated in part:

In return/or a loan that I have received, I promise to pay [] $200, 000.00 .. . plus interest, to the order of the Lender. The Lender is Community Mortgage Company.
I understand that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the "Note Holder."

Clerk's Papers (CP) at 32 (emphasis added).

The deed of trust named Community Mortgage Company as the beneficiary and Chicago Title Insurance Company as the Trustee. The deed of trust stated in part:

Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property.

CPatl7. In open court, Canzoni admitted to signing the note and the deed of trust.

2. Columbia's Acquisition of the Note and the Deed of Trust

In 2003, Community Mortgage Company assigned the deed of trust to American Marine Bank. Chicago Title Insurance Company remained the trustee. Community Mortgage Company endorsed the note to American Marine Bank with an allonge. Columbia became the note's holder on January 30, 2010 after acquiring American Marine Bank's assets, including the note and deed of trust.[2] Columbia could not find the original note, but had the note's photocopy, which Columbia presented to the superior court.

3. Canzoni's Default and "EFT Instrument"

Canzoni had withdrawn the entire $200, 000 loan principal by March 10, 2003. Canzoni made payments on the loan from October 1, 2002, until May 4, 2011. But then Canzoni stopped making payments on the loan, which placed him in default.

In 2012, following Canzoni's default, Canzoni attempted to discharge the remainder of his loan debt by sending Columbia a check for $185, 656.41. This check was drawn on a closed bank account with Anchor Savings Bank. On the check's front, Canzoni wrote, "EFT Only" and "For Discharge of Debt." CP at 302. On the check's back, he wrote, "Not for Deposit EFT Only" and "For Discharge of Debt." CP at 303. Canzoni also signed the check's back as an "Authorized Representative, " and wrote "Without Recourse" under his signature. CP at 303.

Columbia informed Canzoni that it could not accept his check because, according to Anchor Savings Bank, the check was not associated with any open account. Columbia offered to accept payment by "cash, cashier's check, money order[, ] or wire transfer." CP at 301.

4. Eisenhower & Carlson, PLLC's Nonjudicial Foreclosure of Canzoni's Property

Due to Canzoni's default and pursuant to the deed of trust, Columbia initiated nonjudicial foreclosure proceedings against Canzoni's property. Columbia's legal representative, Eisenhower & Carlson, PLLC (Eisenhower), was appointed as the deed of trust's trustee. Eisenhower began a trustee's sale of the property.

B. Procedural History
1. Columbia's Complaint and Motion for Preliminary Injunction

While the nonjudicial foreclosure was pending, Columbia filed a complaint for specific performance of the deed of trust provision that authorized the lender's entry on and inspection of the property. Columbia's complaint requested

a court order immediately requiring [Canzoni] to grant Columbia Bank or its agents reasonable access to the Property for the purposes of conducting an appraisal and environmental inspection of the Property.

CP at 9. Columbia's complaint limited its request to an order requiring Canzoni to allow Columbia to enter and inspect the property, stating that "[t]hrough this action, Columbia Bank is not seeking satisfaction of [Canzoni's loan]." CP at 8. After filing its complaint, Columbia moved the superior court to enter a preliminary injunction seeking reasonable access to the property for the purposes of conducting an appraisal and environmental inspection.

2. Canzoni's "Bill in Equity"

In response to Columbia's complaint and motion for a preliminary injunction, Canzoni filed a document entitled "Bill in Equity." Canzoni's "Bill in Equity" requested many forms of relief, including that

all alleged accounts, principal and interest, public and private side are paid in full and that there is no obligation whatsoever by the complainants to either make additional substitution or suffer any attempts of being deprived of land and property owned free and clear.
That a 'FULL RECONVEYANCE DEED' and consequently the original Trust Res with wet ink signatures is released to the Complainants as paid in full without further ado.

CP at 58.

3. Canzoni's Motion To Vacate the Superior Court's Preliminary Injunction

After receiving Canzoni's "Bill in Equity, " the superior court granted Columbia's request for a preliminary injunction, allowing Columbia to enter and inspect the property. The preliminary injunction required Columbia to execute and file a $100 bond. Canzoni then moved to vacate this preliminary injunction.

During Canzoni's argument to vacate the preliminary injunction, he made the following statements to the superior court:

But nevertheless, before we stopped payments on the loans, or the alleged loans, Columbia Bank officially is a servicer of the loan and not necessarily an issuer of a loan.
So we did basically sign, let's say, the promissory note and the deed of trust not being aware what's—of what's really going on, and that led to the understanding that we are actually not having been loaned any money.

Verbatim Report of Proceedings (VRP) at 35. Later during that same hearing, Columbia's attorney made the following statements to the superior court, which Canzoni claims constituted witness testimony:

Your Honor, if I may continue. The points that Mr. Canzoni raised during his initial argument was I believe, if I heard correctly, acknowledged that at some point in time he did sign a note and deed of trust. Although—and made payments towards that note and deed of trust, at a later date decided that he was not subject to the note and deed of trust and stopped making payments.
[B]ecause there's no basis in law or fact for them under 12(b)(6) or otherwise. This is not a case where there is a bona fide dispute, for instance, that a loan was made. This is not a case where, for instance, a national bank using robo signers has apparently started a wrongful foreclosure. This is a case where the record reflects abundantly there was a loan. It was made. It's an obligation of the defendants, and it's been in default for some period of time. At the core factually we submit this is a very simple case, and as a result, we'd ask the court to deny the defendant's motions thereby enabling this case to remain pending and allowing the bank to proceed with a nonjudicial foreclosure sale.

VRP at 49, 88. After the hearing, the superior court entered an order reaffirming its preliminary injunction.

4. Canzoni's Motions To Dismiss, Stay Trustee's Sale, and Challenge Jurisdiction

After the superior court reaffirmed its preliminary injunction, Canzoni filed three motions with the superior court. First, Canzoni moved under CR 12(b)(6) to dismiss Columbia's complaint for failure to state a claim upon which relief can be granted. Second, Canzoni moved to stay the trustee's sale until the superior court ruled on his CR 12(b)(6) motion. Third, Canzoni moved to challenge the superior court's jurisdiction to hear this matter on grounds that he is a living person, rather than a corporate entity. The superior court denied Canzoni's three motions in their entirety.

5. Canzoni's Motion To Stay the Nonjudicial Foreclosure Proceedings

After the superior court denied Canzoni's three motions Eisenhower successfully sold the property through its trustee's sale. Following this sale, Canzoni moved the superior court to stay the nonjudicial foreclosure...

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